Overtime rule challenged in court

OVERTIME RULE CHALLENGED IN COURT: Two lawsuits were filed yesterday in Texas against the Labor Department’s overtime rule, one by attorneys general in 21 states and the other by 50 business groups led by the U.S. Chamber of Commerce. The rule, which takes effect in December, will double (to $47,476) the salary threshold under which virtually all workers are guaranteed time-and-a-half pay whenever they work more than 40 hours in a given week. In addition, the rule will index the salary threshold to inflation.

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The state lawsuit, led by Texas Attorney General Ken Paxton and Nevada Attorney General Adam Laxalt, argues that the rule “infringes upon state sovereignty and federalism by dictating the wages that states must pay to those whom they employ in order to carry out their governmental functions, what hours those persons will work, and what compensation will be provided where these employees may be called upon to work overtime.” States will be forced to cut back on public services, the lawsuit says, if the rule goes into effect.

The states’ lawsuit says that in elevating the salary threshold test over another provision in the 1938 Fair Labor Standards Act that exempts executive, administrative or professional employees, the regulation “defies the statutory text.” The attorneys general are essentially complaining that the Labor Department did not update the duties test, said Judy Conti, federal advocacy coordinator at the National Employment Law Project, even though business groups expressly asked DOL not to change that. (The duties test exempts employees from overtime pay if they make more than the salary threshold and have responsibilities that are deemed executive, administrative or professional.) “This lawsuit to me is a gold plated invitation to the next administration to change the duties test and make it mean something again,” Conti said.

The Chamber of Commerce’s lawsuit also alleges that the rule violates the Fair Labor Standards Act, but on slightly different grounds. Randy Johnson, senior vice president of labor, immigration and employee benefits at the Chamber, explained to Morning Shift that the lawsuit advances two arguments. The first is that the Labor Department’s salary threshold is “indefensibly high.” DOL “departed from past precedent,” Johnson said, “and used methodology that was never used by the DOL before.” The second argument is that the Labor Department lacked the statutory authority to index the threshold to inflation because Congress “has never authorized indexing of the minimum salary thresholds related to overtime under the [Fair Labor Standards Act.]” By tying the new threshold to inflation, Johnson said, the Labor Department violated the Administrative Procedure Act, because the Labor Secretary acted outside his authority.

In a statement, Labor Secretary Tom Perez said the agency was “confident in the legality of all aspects of [the] final overtime rule.” He said the lawsuits “seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay” and that he looks forward “to vigorously defending [the Labor Department’s] efforts to give more hardworking people a meaningful chance to get by.”

This morning the committee will mark up a bipartisan bill to shore up the United Mine Workers’ health and pension plans using money from the Abandoned Mine Reclamation Fund and the U.S. Treasury. The bill is expected to clear the committee. Although Senate Majority Leader Mitch McConnell last year prevented the bill from getting attached to last December’s omnibus spending bill, he is not expected to block it this time around. A spokesperson told POLITICO’s Ben Weyl that “Leader McConnell has met with Kentucky UMWA retirees on a number of occasions to discuss this and other matters impacting the coal industry, and has long been convinced it is an issue that deserves open, transparent debate through regular order. To that end, he appreciates the Finance Committee considering the legislation.”

Once it finishes with the UMW pension bill, the committee will take up a package of bipartisan proposals, including a proposal from Ranking Member Ron Wyden (D-Ore.) that would allow individuals to contribute to IRAs past the age of 70 and a half.

The fun begins at 10 a.m. in room 215 of the Dirksen Senate Office Building.

KLINE ASKS DOL ABOUT ‘BURROWING’: House Education and the Workforce Committee Chairman John Kline sent a letter to Labor Secretary Tom Perez Tuesday asking him to enumerate and justify any new positions created inside the department since January 2016. In the letter, Kline warned against “burrowing in,” or allowing political appointees at a government agency to convert to career positions. In the letter, Kline wrote that “burrowing in” limited “merit-based, competitive hiring and promotion” and hampered “the effectiveness of the agency.” Kline also asked Perez to provide a list of all proposed and final rules DOL intends to complete before the end of the administration. In a statement, Kline said the Committee “will do everything [it] can to ensure these agencies do not spend the next few months working behind closed doors to cement the administration’s extreme, partisan agenda.” Read the letter here.

THE COST OF MASS DEPORTATION? $4.7 TRILLION: A report out today from the liberal Center for American Progress considers the potential economic impact of deporting all the unauthorized immigrants in the U.S., as has been proposed by Donald Trump. Removing all seven million unauthorized immigrants currently working in the U.S. would reduce GDP by 1.4 percent immediately, the report said, and eventually by 2.6 percent. It would reduce cumulative GDP by $4.7 trillion over 10 years, and would cost the federal government nearly $900 billion in lost tax revenue over that same time period. States like California, Texas, New York and New Jersey, with large populations of unauthorized workers, would see the largest declines in state GDP. As for the deportations’ impact on the native workforce, CAP said that with “current unemployment rates low in most industries, the incentives for remaining residents to work more in order to fill in any gaps left by deported workers would most likely be small and temporary.” Read the full report here.

SPEAKING OF IMMIGRATION: Some advocates say Donald Trump’s anti-immigration rhetoric has prompted efforts to curtail legal immigration as well. The Wall Street Journal’s Siobhan Hughes writes that lawmakers are divided over caps on worker visas, a program that grants special visas to Afghans who have helped the U.S. during the war in Afghanistan, and a program that grants green cards to foreigners who invest at least $500,000 in projects that will create U.S. jobs. “Are we seeing a significant diminution of support for legal immigration? That’s what I’m afraid of because of the way Trump and Trump’s support could legitimize it,” Tamar Jacoby, president of ImmigrationWorks USA, told the Wall Street Journal. New York Times columnist Eduardo Porter reports that under a Trump administration, the U.S. population would likely shrink to 323 million by 2024, 22 million fewer people than the Census Bureau currently projects. Read more from the Wall Street Journal and the New York Times.

PERKINS HITS SNAG: Senate HELP committee members were scheduled today to vote on a bill to reauthorize the Perkins Career and Technical Education Act. But tensions over how much authority the Education Secretary should have in overseeing state spending plans put the vote on hold. The delay comes a week after the House passed a bill, 405-5, to reauthorize the Perkins Act. HELP Committee Chairman Lamar Alexander, who originally scheduled the vote on the Senate bill, wants greater restrictions on the Education Secretary than those in the House bill. “Congress should be able to finish its work on Perkins this year,” Alexander told Morning Shift. “But I'm not going to bring it before the committee until I can be assured that the education secretary will follow the law instead of rewriting it in the way he is trying to do with the law we passed to fix No Child Left Behind." A spokeswoman for Alexander said the lawmaker is shooting for a markup during the lame duck session.

FEDERAL EMPLOYEES ONE PERCENT HAPPIER: Federal agency workers are more satisfied with their jobs this year than they were last year, according to the Office of Personnel Management’s latest Federal Employee Viewpoint Survey. The Global Satisfaction Index, which measures employee satisfaction, increased 1 percent government-wide, up to 61 percent. The Employee Engagement index also increased 1 percent, to 65 percent. Agencies where workers were most satisfied included OMB, NASA, the SEC, FERC and the FTC. Not so satisfied? DHS, the Broadcasting Board of Governors, the Small Business Administration, National Archives and Records Administration, and the Department of Veterans Affairs. See the full survey results here.

COFFEE BREAK

— “Fully autonomous robots: the warehouse workers of the near future,” from the Wall Street Journal

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About The Author : Marianne LeVine

Marianne LeVine is a reporter at POLITICO who covers lobbying and co- authors POLITICO Influence. Prior to her stint on the lobbying beat, Marianne covered labor policy for POLITICO Pro, writing about regulations related to overtime pay, retirement advice and occupational health and safety. Her reporting in 2016 about domestic abuse allegations against President Donald Trump's first nominee for labor secretary, Andrew Puzder, was a key part of the debate surrounding his nomination, which he ultimately withdrew. Prior to working at POLITICO, Marianne was an intern in the Los Angeles Times' Washington, D.C. bureau.

She graduated from Stanford undergrad in 2013, with degrees in International Relations and French and completed Stanford's Graduate Program in Journalism in 2014.